“Protectionism and Non-Resource Economic Growth: Evidence from Azerbaijan”
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Which Developmentalism
1 Which developmentalism? A Keynesian-Institutionalist proposal Fernando Ferrari Filho Professor of Economics at Federal University of Rio Grande do Sul and Researcher at National Council for Scientific and Technological Development, Brazil. [email protected] Pedro Cezar Dutra Fonseca Professor of Economics at Federal University of Rio Grande do Sul and Researcher at National Council for Scientific and Technological Development, Brazil. [email protected] Abstract: Academic discussion of Brazil’s economic growth is currently framed in terms of export-led growth and wage-led growth, identified, respectively, with the new- developmentalism and the social-developmentalism approaches. This article presents a Keynesian-Institutionalist proposal to the Brazilian economy based on a wage-led regime without neglecting the long run balance of payment on current account requirement to ensure macroeconomic stability in the Brazilian economy. Keywords: New-developmentalism, social-developmentalism, Keynesian- Institutionalist, wage-led, profit-led and export-led growths. JEL Codes: B, B5. 1 Introduction While priority was given to monetary stability during the 1980s and 1990s, economic growth has gradually been finding its way back to both theoretical economic debate and economic policy discussions in Brazil since the 2000s. This has been due partly, on the one hand, to the election of various governments critical of neoliberalism in Latin America and, on the other hand, to the 2007-2008 financial crisis, which restored interventionism to the agenda, -
Underestimating Savings and Investment in an Open Economy
View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics WP-2007-015 Data and Definitions: Underestimating Savings and Investment in an Open Economy Ashima Goyal Indira Gandhi Institute of Development Research, Mumbai October 2007 Data and Definitions: Underestimating Savings and Investment in an Open Economy1 Ashima Goyal Indira Gandhi Institute of Development Research (IGIDR) General Arun Kumar Vaidya Marg Goregaon (E), Mumbai- 400065, INDIA Email: [email protected] Abstract This note clarifies definitions and derives from first principles the relationship between investment, domestic and foreign savings in order to show that there is underestimation of investment and foreign savings given conceptual macroeconomic definitions and Indian practice. Indian national accounts report and use gross domestic savings but the measure of capital inflows used with it is the one appropriate for gross national savings. The degree of underestimation is shown using recent data and implications drawn from the errors. Key words: gross domestic and national savings, capital formation, national accounts JEL Code(s): E21, E22, F36, O47 1 The author thanks Atul Sarma and Raghbendra Jha for comments and T.S.Ananthi for help with the tables. 2 Data and definitions: Underestimating Savings and Investment in an Open Economy Ashima Goyal The Indian statistical and measurement system set up was advanced for its time and place. Experts nurtured it carefully. But innovation was required to cut through complexities due to underdevelopment and to lack of data for the large unorganized sectors. Approximations are particularly marked in the estimation of savings and investment and where the open economy impinges on the two. -
Open Economy Macroeconomics Lecture Notes Department of Economics BOGAZICI EC 208
Open Economy Macroeconomics Lecture Notes Department of Economics BOGAZICI EC 208 Ozan Hatipoglu Department of Economics, Bogazici University Spring 2018 Ozan Hatipoglu (Department of Economics) Open Economy Macroeconomics Spring 2018 1 / 1 Role 1: Transfers purchasing power from one currency to another and allows for international transactions. Role 2: Provides credit for foreign trade Role 3: Facilitates hedging against currency shocks Special Characteristics 1: Largest market in the world in terms of trade volume (over $6 trillion daily in spot, forward and swaps) Special Characteristics 2: 24 hours trading and no trading limit Special Characteristics 3: No commissions by brokers but bid-ask spread required by dealers Foreign Exchange (FX) Markets -Definition, Functions and Features Definition: A market where national currencies are bought and sold Ozan Hatipoglu (Department of Economics) Open Economy Macroeconomics Spring 2018 2 / 1 Role 2: Provides credit for foreign trade Role 3: Facilitates hedging against currency shocks Special Characteristics 1: Largest market in the world in terms of trade volume (over $6 trillion daily in spot, forward and swaps) Special Characteristics 2: 24 hours trading and no trading limit Special Characteristics 3: No commissions by brokers but bid-ask spread required by dealers Foreign Exchange (FX) Markets -Definition, Functions and Features Definition: A market where national currencies are bought and sold Role 1: Transfers purchasing power from one currency to another and allows for international transactions. -
Centralisation of Wage Bargaining and Macroeconomic Performance .A Survey
OECD Economic Studies No . 21. Winter 1993 CENTRALISATION OF WAGE BARGAINING AND MACROECONOMIC PERFORMANCE .A SURVEY Lars Calmfors CONTENTS Introduction ................................................ 162 I. lnternalisation effects and centralisation ....................... 163 II. The hump-shape hypothesis and the effect of competitive pressures 165 A . The basic theoretical argument .......................... 165 B . Extensions to the basic model ........................... 167 C . Centralisation and decentralisation in practice ............... 170 Ill. Different dimensions of decentralisation ....................... 172 A . Decentralisation according to profession ................... 172 B . Centralisation by region ................................ 174 C . The extent of unionisation .............................. 175 IV. Multilevel bargaining ...................................... 176 V . Empirical research ....................................... 179 A . Studies of centralisation and macroeconomic performance ..... 179 B. Centralisation and parameters in wage and price equations .... 180 C . The contribution of empirical research ..................... 181 Vl . Conclusions ............................................ 182 Bibliography ................................................ 187 ~~ An extended version of this paper is available as OECD Economics Department Working Papers. No. 131. The author is from the Institute for International Economic Studies. Stockholm University. He is grateful to Jan Broms. Ann Chadeau. Jsrgen Elmeskov. -
Oecd Development Centre
OECD DEVELOPMENT CENTRE Working Paper No. 147 (Formerly Technical Paper No. 147) CHINA’S UNFINISHED OPEN-ECONOMY REFORMS: LIBERALISATION OF SERVICES by Kiichiro Fukasaku, Yu Ma and Qiumei Yang Research programme on: Reform and Growth of Large Developing Countries March 1999 CD/DOC(99)4 TABLE OF CONTENTS ACKNOWLEDGEMENTS ........................................................................................ 3 RÉSUMÉ .................................................................................................................. 4 SUMMARY ............................................................................................................... 4 PREFACE ................................................................................................................ 6 I. INTRODUCTION............................................................................................... 7 II. OPENING UP THE SERVICE MARKETS ........................................................ 11 III. POLITICAL ECONOMY OF LIBERALISATION OF SERVICES ....................... 17 IV. CONCLUDING REMARKS ............................................................................... 23 ANNEX: OPEN-ECONOMY REFORMS SINCE 1994 ............................................. 25 NOTES AND REFERENCES ................................................................................... 32 BIBLIOGRAPHY ...................................................................................................... 35 ANNEX TABLE 1. REGULATIONS ON THE OPENING-UP OF THE SERVICES SECTOR IN -
A Growth Model of the Data Economy
A Growth Model of the Data Economy Maryam Farboodi* and Laura Veldkamp October 29, 2020 Abstract The rise of information technology and big data analytics has given rise to \the new econ- omy." But are its economics new? This article constructs a growth model where firms accumulate data, instead of capital. We incorporate three key features of data: 1) Data is a by-product of economic activity; 2) data is information used for prediction, and 3) uncertainty reduction en- hances firm profitability. The model can explain why data-intensive goods or services, like apps, are given away for free, why many new entrants are unprofitable and why some of the biggest firms in the economy profit primarily from selling data. While these transition dynamics differ from those of traditional growth models, the long run features diminishing returns. Just like accumulating capital, accumulating predictive data, by itself, cannot sustain long-run growth. Does the new information economy have new economics? In the information age, production increasingly revolves around information and, specifically, data. Many firms, particuarly the most valuable U.S. firms, are valued primarily for the data they have accumulated. Collection and use of data is as old as book-keeping. But recent innovations in data-intensive prediction technologies (AI) allow us to use more data more efficiently. How will this new data economy evolve? Because data is non-rival, increases productivity and is freely replicable (has returns to scale), current thinking equates data growth with idea or technological growth. This article uses a simple framework to argue that data accumulation has forces of increasing and decreasing returns, as well as returns to specialization. -
API-120: Advanced Macroeconomics for the Open Economy, Fall 2018
August 1, 2018 + API-120: Advanced Macroeconomics for the Open Economy, Fall 2018 Harvard Kennedy School Course Syllabus: prospectus, outline/schedule and readings Staff: Professor: Jeffrey Frankel Littauer 217. [email protected]. Faculty Assistant: Minoo Ghoreishi Belfer 510A. (617) 384-7329. Teaching Fellow: Thomas Moatti Course Assistants: Munmun Biswas, Maria Lucia Flores and Thebe Tsatsimpe. Times: Lectures: Mondays and Wednesdays, 2:45-4:00 pm, in Starr Auditorium.1 2 Review Sessions: Fridays: 10:15 am in L130; and 11:45 am, in L280. Final exam: Friday, Dec.14, 2:00-5:00 pm. Course Description: This course is the first in the two-course sequence on Macroeconomic Policy in the MPA/ID program. It particularly emphasizes the international dimension. The general perspective is that of developing countries and other small open economies, defined as those for whom the terms of trade are determined on world markets and for whom foreign income, inflation and interest rates can also be taken as given. The focus is on monetary, fiscal, and exchange rate policy, and on the determination of the current account balance, national income, and inflation. Models of devaluation include those where the price of internationally traded goods in terms of non-traded goods is central. A theme is the implications of increased integration of global financial markets. Another is countries’ choice of monetary regime, especially the degree of exchange rate flexibility. There will be applications to the problems of commodity-exporting countries, among other topics. (Such topics as exchange rate overshooting, speculative attacks, and portfolio choice and debt crises will be covered in the first half of API 119.) Nature of the approach: The course is largely built around analytical models. -
Why-Do-More-Open-Economies-Have
Forthcoming, Journal of Political Economy WHY DO MORE OPEN ECONOMIES HAVE BIGGER GOVERNMENTS? Dani Rodrik Harvard University February 1996 Revised, March 1996 Revised April 1997 This revision, January 1998 Mailing address: John F. Kennedy School of Government, 79 Kennedy Street, Cambridge, MA 02138. Phone: (617) 495-9454. Fax: (617) 496-5747. E-mail: [email protected] WHY DO MORE OPEN ECONOMIES HAVE BIGGER GOVERNMENTS? ABSTRACT There exists a positive correlation between an economy’s exposure to international trade and the size of its government. The correlation holds for most measures of government spending, in low- as well as high-income samples, and is robust to the inclusion of a wide range of controls. One explanation is that government spending plays a risk-reducing role in economies exposed to significant amount of external risk. The paper provides a range of evidence consistent with this hypothesis. In particular, the relationship between openness and government size is strongest when terms-of-trade risk is highest. Dani Rodrik Harvard University John F. Kennedy School of Government 79 Kennedy Street Cambridge, MA 02138 (617) 495-9454 Fax: (617) 496-5747 E-mail: [email protected] WHY DO MORE OPEN ECONOMIES HAVE BIGGER GOVERNMENTS? I. Introduction This paper documents a little-known empirical regularity and provides a plausible explanation for it. The regularity consists of a surprisingly strong and robust association between an economy's exposure to foreign trade and the size of its government. The explanation is that government expenditures are used to provide social insurance against external risk. The claim that there is a positive association between trade exposure and the scope of government is at first sight surprising. -
Brazil's Liberal Neo-Developmentalism
Review of International Political Economy 2012, iFirst: 1–34 Brazil’s liberal neo-developmentalism: New paradigm or edited orthodoxy? Cornel Ban The Watson Institute for International Studies, Brown University, Providence, RI, USA ABSTRACT Is Brazil’s economic policy regime a mere tinkering of the Washington Con- sensus? The evidence suggests that Brazilian governments institutionalized ahybridpolicyregimethatlayerseconomicallyliberalprioritiesoriginat- ing in the Washington Consensus and more interventionist ones associated with neo-developmentalist thinking. To capture this hybridity, the study calls this regime ‘liberal neo-developmentalism’. While defending the goal of macroeconomic stability and sidelining full employment, Brazilian gov- ernments also reduced reliance on foreign savings and employed a largely off-the-books stimulus package during the crisis. Brazil experienced impor- tant privatization, liberalization and deregulation reforms, but at the same time the state consolidated its role as owner and investor in industry and banking while using an open economy industrial policy and a cautious ap- proach to the free movement of capital. Finally, while conditional cash trans- fers fit the Washington Consensus, Brazil’s steady increases in the minimum wage, industrial policies targeted at high employment sectors and the use of state-owned firms to expand welfare and employment programs better fit aneo-developmentalistpolicyregime.Insum,whilethemaingoalsofthe Washington Consensus were not replaced with neo-developmentalist ones, -
Models of the Developmental State
Models of the developmental state Luiz Carlos Bresser-Pereira Abstract This paper seeks to understand the developmental state and its historical role in industrial revolutions and afterwards. First, the developmental state is defined as an alternative to the liberal state. Second, it is argued that industrial revolutions have always taken place within the framework of a developmental state. Third, four models of developmental states are defined according to the point in time at which the industrial revolution took place and the central or peripheral character of the country. Fourth, the paper describes how the state withdraws partially from the economy after the industrial revolution, but the developmental state continues to have a major role in directing industrial policy and in conducting an active macroeconomic policy. Keywords Public administration, economic planning, macroeconomics, liberalism, nationalism, economic policy, economic development JEL classification O10, O11, O19 Author Luiz Carlos Bresser-Pereira is an Emeritus Professor with the Department of Economics of the Sao Paulo School of Economics, Getulio Vargas Foundation, Brazil. Email: [email protected]. 36 CEPAL Review N° 128 • August 2019 I. Introduction In the 1950s, Brazilian political scientists and economists identified “developmentalism” as a set of political ideas and economic strategies that drove Brazil’s rapid industrialization and underpinned the coalition of social classes identified with national development. Hélio Jaguaribe (1962, p. 208) stated in the early 1960s that “the core thesis of developmentalism is that the promotion of economic development and the consolidation of nationality stand as two correlated aspects of a single emancipatory process”. Through “national developmentalism”, which would become the established term for the country’s development strategy, Brazilian society was successfully overcoming the patrimonial state that characterized its politics until 1930. -
Topic 12: the Balance of Payments Introduction We Now Begin Working Toward Understanding How Economies Are Linked Together at the Macroeconomic Level
Topic 12: the balance of payments Introduction We now begin working toward understanding how economies are linked together at the macroeconomic level. The first task is to understand the international accounting concepts that will be essential to understanding macroeconomic aggregate data. The kinds of questions to pose: ◦ How are national expenditure and income related to international trade and financial flows? ◦ What is the current account? Why is it different from the trade deficit or surplus? Which one should we care more about? Does a trade deficit really mean something negative for welfare? ◦ What are the primary factors determining the current-account balance? ◦ How are an economy’s choices regarding savings, investment, and government expenditure related to international deficits or surpluses? ◦ What is the “balance of payments”? ◦ And how does all of this relate to changes in an economy’s net international wealth? Motivation When was the last time the United States had a surplus on the balance of trade in goods? The following chart suggests that something (or somethings) happened in the late 1990s and early 2000s to make imports grow faster than exports (except in recessions). Candidates? Trade-based stories: ◦ Big increase in offshoring of production. ◦ China entered WTO. ◦ Increases in foreign unfair trade practices? Macro/savings-based stories: ◦ US consumption rose fast (and savings fell) relative to GDP. ◦ US began running larger government budget deficits. ◦ Massive net foreign purchases of US assets (net capital inflows). ◦ Maybe it’s cyclical (note how US deficit falls during recessions – why?). US trade balance in goods, 1960-2016 ($ bllions). Note: 2017 = -$796 b and 2018 projected = -$877 b Closed-economy macro basics Before thinking about how a country fits into the world, recall the basic concepts in a country that does not trade goods or assets (so again it is in “autarky” but we call it a closed economy). -
Chapter Eight Trade Policy Openness, Government Spending
Chapter Eight Trade Policy Openness, Government Spending, and Democratic Consolidation Michael J. Hiscox Scott L. Kastner The current political environment in the United States demonstrates clearly that trade policy can be a highly contentious issue within democracies. Despite low unemployment and a growing economy, members of Congress have increasingly demanded that protectionist barriers be raised against trade with China. In the 2004 presidential election, the protectionist message of John Edwards appeared to resonate with middle-class workers, even though the vast majority of them probably benefit from trade openness (via cheaper consumer goods), and a relatively small percentage of them will actually lose their jobs as a result of trade. Part of the reason for this apparent contradiction may well reside in the lack of an extensive social insurance policy for those who do lose their jobs as a result of trade: even though a majority may expect to benefit from trade ex ante, a majority might still reject openness because its downside risks are too high in the absence of insurance (see, for example, Fernandez and Rodrik 1993). That such a dynamic shows signs of influencing public policy even in the United States, with its large internal market that is relatively isolated from shocks in the global economy, suggests that sustaining openness in democracies that lack substantial social safety nets may be a dicey proposition (Adsera and Boix 2002). In the United States, if the anxiety generated by trade policy openness combined with limited social insurance were indeed to become a primary issue determining how people cast their votes, policy would likely change—either in the direction of less openness to the global economy or more welfare state spending.